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LG Realty’s acquisition of public park and development rights in Pittsburgh’s East Liberty neighborhood blocked

“The URA took a bold step.”

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When LG Realty Advisors began evicting residents from its East Liberty Penn Plaza apartment complex last June, residents protested and the city intervened. The action highlighted the growing lack of affordable housing in the city.

Subsequently, LG, which is owned by the Gumberg family, negotiated a deal with the city and Penn Plaza tenants. Language was included in the agreement that would recommend the sale of the adjacent 2.2-acre Enright Park to LG. It also suggested that LG be chosen to develop the nearby Mellon Orchard site, an agreement which would require at least 20 percent of the units there to be affordable. Critics of the deal questioned whether the city was giving up too much.

As it turns out, however, the city isn’t giving up much of anything. 

Last month, Pittsburgh City Council voted to keep Enright Park as public land and last week the Pittsburgh Urban Redevelopment Authority awarded the Mellon Orchard site to TREK Development, even though LG entered a bid to develop the space.

“The URA took a bold step,” says Bloomfield-Garfield Corp. executive director Rick Swartz. “The developer that everyone thought had the inside track did not have the inside track.”

Kevin Acklin, Mayor Bill Peduto’s chief of staff and URA chair, says he was very pleased with the URA’s choice. “I think it was near-unanimous support for TREK.”

TREK President Bill Gatti says its preliminary proposal will include 49 affordable units to residents at or below 60 percent of the area median income — in other words, about 47 percent of the proposed 104 units would be affordable. Additionally, Gatti says the remaining units will be priced at 10 percent to 15 percent below market rate. Monthly rents will range from $600 to $1,800, he says.  

Lillian Grate, of the Penn Plaza tenant council, sat on the URA committee that chose TREK. She says it was a “hard selection,” but TREK was exactly what they were looking for. She lauded the affordability measures, as well as TREK’s commitment to have a social worker on site and to include retail spaces that are minority- and women-owned.

“We are looking forward to collaborating with the community,” says Gatti. “We are very literate when it comes to affordable-housing funding, and we are intentional with the community; everyone gets a seat at the table.” 

Says Swartz: “TREK has always made a good-faith effort to work with the community. You can’t say the same for the Gumbergs. I think it is hard for them to realize in 2016 that things work a lot differently than in 1986 — they are still locked into that.”

Jonathan Kamin, attorney for LG Realty Advisors, did not return calls seeking comment.

Bill Bartlett, of advocacy group Action United, says the proposed rents at Mellon Orchard are supposed to reflect the range of rents at Penn Plaza, which residents said ranged from $470 to $850. Gatti, of TREK, says the subsidized rent levels for low-income residents will be worked out through a community process.

TREK’s proposed number of affordable units exceeds the requirement in the Penn Plaza agreement. However, while 100-some households from Penn Plaza were given priority to move into Mellon Orchard, only 49 affordable units were earmarked. 

Bartlett still holds out hope for LG Realty’s future Penn Plaza development, however. “I am cautiously optimistic that they will replicate the rents at Penn Plaza and they will include rents for those at low- and extremely-low-income levels.” LG has said they plan to build a 400-unit mixed-use development. 

Because LG was not selected for Mellon Orchard, it is now not required to include any affordable units at the revamped Penn Plaza. LG is required to make “commercially reasonable efforts” to include affordable units at one of its Penn Plaza buildings, but only at levels set by city council, which has yet to finalize its affordable-housing recommendations.

“We will have to cross that bridge when it comes,” says Acklin. “Clearly, the city remains committed to affordable housing in East Liberty, especially in areas such as Penn Plaza.”


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